Four Simple Steps to Successful Debt Shrinkage

Posted on 24th Jan, 2017 by Barbara Davidson

Paying off debt is no easy task, especially when it’s substantial. You feel like you’re drowning in payments, and no matter how much you continue to pay, the amount never seems to go down!

That’s why we’ve put together four easy steps for tackling debt. You’ll be able to take control of your payments and start seeing a difference sooner rather than later. Keep reading to see how you can get started!


1. Gather and Sort All Relevant Paperwork

Gather all the paperwork you have relating to current debts — it might be a lot of paper — so that you have everything in one place.

If you have a mix of digital and hard copies, consider printing out the digital copies so you’re not switching back and forth. Alternately, you could scan all of your hard copies so that everything is on your computer. Either way, it’s best to choose one method and stick with that.

Once you’ve gathered every last document you need, you have finished step one!


2. Prioritize Debt Payoffs

As you sort through all of your gathered documents, start organizing according to interest rate.

The higher the interest rate on a bill, the faster you’ll want to pay it off. Letting high interest debts accumulate will make it difficult for you to pay off, since the interest will add up quickly! You can focus on tackling any lower interest debts later on — letting these wait a little longer to be paid off will not hurt your finances as much.

This isn’t to say you’ll stop making payments on those lower interest rates. You’ll need to continue your payments on all of your outstanding debts. You’ll take bigger strides towards those higher interest debts by paying as much as you can on those while maintaining minimum payments on all your lower interest bills. If you can swing it, weekly vs. monthly payments will help you pay off even faster by slowing down the interest accrual.


3. Explore Options to Lower Interest Rate

You might be surprised to hear that not all interest rates are set in stone.

If you have any credit card debt with high interest rates, call the credit card company and negotiate for a lower interest rate. They may decline to outright lower the interest on your current card, but may be open to issuing you a new card with a lower rate to which you can transfer that debt. Be cautious with this route though: Most credit card companies charge a transfer balance that is at minimum 5%. You’ll need to do some calculations to see how that additional amount would impact your payment options.

Your best option is to get your debt transferred to a card that offers a zero-interest balance transfer. The card won’t be interest free for forever, but there’s a good chance that you’ll have at least 12 months without interest. It’s an excellent way to pay off the actual debt itself and not get bogged down with added interest. However, if you go this direction, you’ll need to make sure you can pay off the debt before the card’s interest kicks in! Interest-free cards often have very high interest rates once the initial “interest-free” period ends.


4. Keep Plugging Along

The most difficult part of paying down debt is how endless the process feels. There will be times when your motivation flags and you’d rather use that work bonus on a night out instead of a larger monthly payment.

But don’t give up — you’ll make it there eventually. It just takes persistence and dedication on your part. Try some of the following ideas to help keep up your payments and avoid further excess spending:





Steinberg, S. (April 9, 2014). 10 easy ways to pay off debt. Retrieved January 17, 2016, from

About Barbara Davidson

Babs is Lead Content Strategist and financial guru. She loves exploring fresh ways to save more and enjoy life on a budget! When she’s not writing, you’ll find her binge-watching musicals, reading in the (sporadic) Chicago sunshine and discovering great new places to eat. Accio, tacos!